SPEECH BY PENANG CHIEF MINISTER LIM GUAN ENG DURING THE OPENING CEREMONY OF THE 29TH WOMEN'S WORLD SQUASH CHAMPIONSHIP IN Sub-terranean Penang International Convention & Exhibition or SPICE Arena OM 18 MARCH 2014.

PENANG AS A SPORTING CITY - “SIMPLY THE BEST!”

Good evening distinguished guests, the players we are celebrating and most importantly the wonderful people of Penang gathered here in Sub-terranean Penang International Convention & Exhibition or SPICE Arena.

To all our guests from near and far, Selamat Datang ke Pulau Pinang.

I would like to acknowledge our friends not only from Malaysia but from all over the world – thank you for coming to Penang to witness the 29th edition of the Women's World Squash Championship. Penang is proud to be organising a world championship for the first time in our history and would like to express our gratitude to the Women Squash Association (WSA) for granting us this honour.

We would like to thank our title sponsors CIMB group and Perbadanan Bekalan Air Pulau Pinang or PBAPP the water providers in Penang. We would like to thank Mr Thomas Chan of Nusmetro for being the event organiser for free, for without Thomas, the Penang state government would not even consider putting up the money for this world event. Also thanks to SP Setia for letting us use the SPICE Arena for free and all of Thomas’ developers friends for their support.

Tonight is a culmination of all the hard work put in day and night by all of them to realise one dream of holding a world championship in Penang and one ambition of making Penang a sporting city of choice in Malaysia.

We have shown to the world that Penang has not only the sporting facilities and supporting infrastructure but most importantly we have the talent, energy, expertise and creativity to produce a world-class event.

Let us show that we have not only Dato Nicol David as a world woman squash champion but that every Penangite is a champion in their own field from our squash association, coaches and trainers to our Penang State EXCO Chong Eng, my sporting officer Lily Heng and volunteers. And the incredible display in the opening ceremony proves indeed that “You are simply the best!”

We thank everyone here for making tonight possible and witness a week of tenacious and exciting matches to produce a world champion in SPICE in Penang. This is possible only because the people of Penang made it possible. Remember why you are all special because you are SIMPLY THE BEST!

1. Thank you for joining us today to witness the agreement signing ceremony of the JICA Partnership Programme that will officially launch an international initiative to reduce non-revenue water, or NRW, in Malaysia.

2. As some of you are aware, NRW represents water loss in the water supply industry. The reduction of NRW is important because less water loss means more water availability for consumers. As such, the reduction of NRW is important to all of us because we always need to have enough water for use at home and at work in the future.

3. Specifically, NRW refers to water loss in the water supply process. It is commonly calculated as the difference, in percentage, of treated water that is produced and supply that is actually billed to consumers. For example: if a water supply operator produces 100 million liters of treated water from its treatment plant but bills consumers for only 80 million liters, the NRW would be 20%.

4. That 20% water loss may be caused by underground leaks, burst pipes, water theft or even water used for fire fighting. Whatever the causes may be, NRW represents loss for a water supply operator. More importantly, it also represents loss of water, a precious resource for daily life.5. As such, NRW percentage is regarded worldwide as key performance indicator in the water supply industry. To put it simply, a water supply operator with a low NRW percentage is generally regarded to be an efficient water supply operator.

6. In 2012, Perbadanan Bekalan Air Pulau Pinang Sdn Bhd, or PBAPP, recorded a NRW percentage of 17.6% for Penang, as compared to the national average of 36.4%, as reported in the Malaysia Water Industry Guide 2013. In short, Penang’s NRW percentage was less than half of the national average. It was, in fact, the lowest amongst all the states in Malaysia.

7. As Chairman of the PBAPP Board, I would also like to mention that since PBAPP was incorporated in 1999, Penang’s NRW percentage has consistently been the lowest in Malaysia. In other words, for 14 consecutive years from 1999 to 2012, PBAPP has proved itself to be the most efficient water supply operator in Malaysia, in terms of NRW management.

8. Accordingly, on 21 November 2013, PBAPP received the inaugural “Water Supply Operator of the Year” and “Efficiency Award” from the Ministry of Energy, Green Technology and Water, or KeTTHA. It is good to know that the Federal Government acknowledges our good results in water supply management in Penang. That said, there is always room for further improvement.

9. This year, in 2014, we have been chosen by the Japan International Cooperation Agency, or JICA, to serve as the lead organisation for the implementation of the JICA Partnership Programme on “NRW (Non-Revenue Water) Reduction Technology Training and Capacity Building in Malaysia”.

10. The aim of this project is for PBAPP to acquire the latest Japanese technology in NRW management to further reduce water loss in Penang. Moreover, a team of PBAPP engineers and technicians will be trained to serve as NRW lecturers. Once this team is ready, this PBAPP team will then provide NRW reduction training for other water supply operators throughout the country, with endorsement from KeTTHA.

12. The duration of the project is from 1 January 2014 – 30 November 2016. Its key elements include: Development of a “training field” for leakage prevention and pipe laying training activities in Penang; Acquisition of relevant NRW management equipment;  Drafting an operational manual for the usage of the field and the equipment;  Technical workshops by visiting Japanese engineers in Penang;  Technical training for selected PBAPP personnel in Japan; Specialised lecturer training for selected PBAPP engineers and technicians, including the preparation of training materials; and Workshops for KeTTHA and other water utilities at least once a year, as well as practical training for the staff of other water utilities by PBAPP trainers.13. To facilitate this project, JICA will provide a partnership grant of RM1.6 million for expenses, while PBAPP will allocate the land for the “training field” and appoint a team of lecturer trainees. PBAPP will also provide the training facilities at the Penang Water Services Academy (PWSA), an industry-specific academy established by the PBA Holdings Group in Penang.

14. JICA has appointed Tokyo Suido Services, or TSS, to work directly with PBAPP on this project. For the record, TSS has helped Tokyo to achieve 3.3% NRW. In this context, we welcome the challenge to work with these Japanese experts to further reduce water loss for Penang, as well as for other states throughout Malaysia.

15. On behalf of the PBAPP Board, I would like to thank JICA for making the right choice in selecting PBAPP and Penang to lead this project. I thank TSS for agreeing to work with us, and I would also like to record my sincere appreciation to KeTTHA for its endorsement. I can assure you that PBAPP, on its part, will provide its 100% commitment to realise the project objectives.

16. In closing, allow me to reiterate that the JICA Partnership Programme on “NRW (Non-Revenue Water) Reduction Technology Training and Capacity Building in Malaysia” is an international initiative for the benefit all water operators in Malaysia. The groundwork begins in Penang and its benefits will be shared with all the other states.

17. With this in mind, I would like congratulate JICA, TSS and PBAPP for signing the agreement to facilitate this programme today. The Penang State Government wishes you all the best in making it a success.

Opening Speech by Penang Chief Minister Lim Guan Eng In Wawasan Open University On The Nishimura Lecture Organised By The Penang Institute On 17 March 2014.

A Sound Education System With Emphasis On STEM Teaching Of Science, Technology, English and Maths Is Our Lifeboat To The Future.

A very good afternoon I bid to all of you. It is my pleasure to welcome the esteemed Professor Kiyohiko Nishimura, former Deputy Governor of the Bank of Japan and Dean of the Faculty of Economics, University of Tokyo, to Penang. He will be delivering a very important lecture that touches on the lessons from the recent financial crises and its relevance to the future of our region.

Economic uncertaintyThe significance of this lecture cannot be over-emphasised, given the looming clouds of economic uncertainties. These uncertainties come from different directions and I shall delve into three main themes.

Firstly, the tapering of quantitative easing by the Fed has commenced, though the pace of tapering may change subject to the robustness of US economic recovery. As we all know, quantitative easing has been an important factor in Asia in the last few years as it allowed extra liquidity to flow into this region. The question is, what will happen when capital leaves? Certainly, there is bound to be an impact on Malaysia.

We are already seeing some effects of the tapering, as our foreign reserves have begun to shrink, which basically means that we are experiencing capital outflow. Whilst the ringgit’s weakening value has seen a rise in exports, it also means that the price of imported goods will increase, thus causing inflation. In these trying times, such an effect will further aggravate cost of living problems for low and middle-income households. Another problem associated with higher inflation is also the risk of increasing interest rates, which may be an added burden to our already high personal household debt problem, which currently stands at 83% to GDP.

Secondly, the Chinese economy is undergoing a period of rebalancing. With slower economic growth expected, its implications are serious considering that China is one of Malaysia’s largest trading partner. Already, there is some re-evaluation of China’s demand potential, especially after China suffered its first onshore bond default following the failure of Shanghai Chaori Solar Energy Science & Technology Co to make an interest payment.

Thirdly, global debt has soared by RMUS$30 trillion or more than 40% from US$70 trillion in mid-2007 to USD100 trillion in mid-2013 according to the Bank for International Settlements. This is due to the fact that governments in crisis suppressing interest rates and borrowing heavily in an attempt to generate growth to pull their economies out of recession. Private companies have taken advantage of record low interest rates by borrowing predominantly to fund share buybacks. The sharp increase in debt puts these countries’ financial security at risk, especially when interest rates begin to increase.

The more relevant question for us, is how do these three uncertainties relate to Penang?

Preparing Penang For The Future.As I said earlier, external shocks will bear significant impact on Malaysia and Penang, being that our economy is still largely dependent on export-oriented manufacturing. Whilst it is impossible for anyone to predict the financial markets, it is important to remember two things:1. A rising tide lifts all boats; and2. Only when the tide recedes do you discover who is swimming naked.

As a responsible government in Penang, we believe in being prepared. For when the day comes that the tide turns, we do not want to be caught naked but instead be the best equipped amongst our peers. In other words, I am talking about strengthening our financial position.

Since taking over in 2008, the Penang state government established a budget-based administration and governance based on the principles of CAT (Competency, Accountability and Transparency). Through the implementation of open competitive tenders for all public procurements and tenders, requiring all state elected representatives to make public declaration of assets and full disclosure of government contracts signed with the private sector, making CAT governance of competency accountability and transparency our core values.

Thus Penang have been able to record budget surpluses every year without increasing any rates, increase our state assets by 50% from RM800 million to RM1.2 billion, rescue a local government(Seberang Perai Municipal Council) from bankruptcy within only one year and more importantly reduce our state debts by 95%. These achievements have been corroborated by Transparency International as well as the annual Auditor-General’s reports.

More importantly, the practice of good and clean governance in Penang has helped us become the top foreign direct investment (FDI) state in Malaysia for the period of 2010 to August 2013, with investments amounting to RM19.7 billion or nearly 20% of Malaysia’s total FDI of RM103 billion. Thus, we have demonstrated that good and clean governance can not only help us save money, but also secure the confidence of investors.

As we move forward, the government is upgrading from a budget-based administration that plugs leakages and cuts waste or inefficiencies to an outcome-based administration which stresses on positive impact and difference to the stakeholders that generates economic growth (pro-growth), creates employment opportunities (pro-jobs) and foster equitable justice (pro-poor).

Penang believes that economic growth alone is not enough if income inequality is not reduced through equitable distribution of wealth. 40 years after Arthur Okun’s book of “Equality and Efficiency:The Big Tradeoff”,International Monetary Fund’s economists have concluded that reducing inequality accelerates not reduces economic growth not in occasional spurts but sustained growth.

Hence, Penang is not only the first state in Malaysian history to wipe out corruption but also the first state to wipe out poverty. Adopting the unconditional cash transfer or UCT model of topping up all families whose monthly household incomes are below the poverty line of RM790 per month, Penang has managed to free itself from absolute poverty. Now, we are focusing on reducing relative poverty through cash aid and providing affordable home ownership by building 20,000 affordable housing units throughout the state in addition to another 20,000 units more from the private sector supply.

Penang has relied on the twin economic engines tourism whether medical, education or recreation in nature and manufacturing in electrical and electronic sectors, automation, medical devices and aerospace. However, the key to future economic success is not an over-reliance on one sector but to seek convergence of not only the manufacturing sector but also both the services and government sector.

Penang is investing in the shared services sector through a RM 3.3 billion Business Process Outsourcing and Information Technology Outsourcing(BPO-ITO) hub that will see the creation of tens of thousands of high-paying and knowledge-intensive jobs. Already, global financial services firm Citibank has opened their Global Citigroup Transaction Services centre here, employing more than 1,000 local employees with an annual volume of 20 million transactions worth USD5.8 trillion.

In addition to Citigroup, other companies that have set up their shared services here include Wilmar, Air Asia, HIS, Atmel, Toll Forwarding and Jurong Shipyard. In total, the IT-BPO Hub will comprise of 74 acres of IT-BPO Park in Bayan Lepas, a planned development of 7 acres BPO Prime in Bayan Baru for ICT companies and a 100,000 sqft Creation Animation Triggers (CAT) in the George Town heritage enclave.

ConclusionIn pursuit of our goal to become an international and intelligent city, we have taken the important steps of institutionalising the fundamentals of rule of law, good and clean governance, as well as integrity in leadership. Following on from that, we have established outcome-based administration that focuses on creating a rising tide that lifts all boats.

While these initiatives have strengthened our financial position and built resilience, we have also taken steps to ensure we stay ahead of the game in manufacturing and services, in order to ensure Penang is best prepared in the eventuality of an economic tidal change.

Education is our lifeboat to the future. Not only can it reduce inequality, it can provide mobility and opportunity to all. Only a sound education foundation can provide ladders of opportunity and escalators to mobility. Penang state government is adopting a 3-prong approach towards strengthening our education system:-•Giving annual funding to existing half-funded vernacular and religious schools;•Building Learning centers that focus of STEM teaching of science, technology, English and Mathematics; and•Attracting world class universities as well as adopting the German vocational school system within multi-national corporations.

These are huge challenges and success is yet uncertain. But we must be willing to try and invest in education. For only when we boldly invest in the future then can we win the future.

For this reason, it is important not to rest on our laurels. Therefore, lectures such as this one today are important as the insight from an insider such as Professor Nishimura will undoubtedly prove to be invaluable to all of us, whether as government, corporations or individuals in Penang and Malaysia.